The Gwadar Port is a deep-sea, warm-water port situated at Gwadar in
Balochistan province of Pakistan. Gwadar is strategically located between
three increasingly important regions: the oil-rich Middle East, heavily
populated South Asia and the economically emerging & resource -laden
region of Central Asia.
It had been a long standing strategic requirement of Pakistan to develop
another port away from the country’s eastern borders and also to
reduce reliance on the main Karachi port.
Gwadar was initially identified as a potential seaport site in 1954, when
a survey of Pakistan’s coast was undertaken. At the time Gwadar
was under Omani rule, the government of Pakistan then started negotiations
with Oman and in September 1958, Pakistan purchased Gwadar (and the rest
of the area under Omani rule) for $3.0 million. Thus, after 200 years
of Omani rule, in December 1958, Gwadar became part of Pakistan, at the
time Gwadar was a small fishing village. The Government of Pakistan built
a small port at Gwadar between 1988 and 1992, at a cost of Rs. 1,623 million,
which included a foreign exchange component of 1,427 million Belgian Francs
(equivalent to Rs. 749 million), the foreign exchange component was arranged
by the contractor. However, the feasibility for a major deep sea port
was started in 1993, as part o Government of Pakistan’s 8th Five
Year Plan (1993-1997). Gifford and Partners & Technecon of Southampton,
United Kingdom, in association with the Karachi based Pakistani firm,
Techno-Consult International, were commissioned to undertake the feasibility
study.
The government of Pakistan eventually embarked on the construction of
a deep water sea port in 2002, with the full help and support of the Chinese
government. The ground breaking ceremony was performed on 22 March 2002
and the first phase of the port was completed by the end of 2004.
In February 2007, the concession agreement for the management of Gwadar
port was awarded to Port of Singapore Authority (PSA) and its partners
(the National Logistic Cell (NLC) and Adeel Karim Group (AK Group)), for
a period of 40 years. The PSA took control of the port on 14 March 2007.
The Gwadar Port was officially inaugurated on 20 March 2007.
The construction of the port cost around $248 million, China provided
more than 80 percent of the finance for the project.The port is located
533km from Karachi and 120Km from the Iranian border. The port can handle
50,000 DWT vessels and it is the only port in the country to have a roll-on,
roll-off berth. The port has 207metres wide, 4.5Km long approach channel,
dredged to 14metres.The facilities at the port consist of;3 Multipurpose
berths, 200metres long.1 Service berth, 100metres long.
It was hoped that the PSA would invest over $500 million in five years
to further develop the port, however the PSA faced a number of challenges
to make the port fully operational, some of these challenges are as follows;
The National Highway Authority was tasked with connecting the port with
the rest of the country by constructing roads, this work at the start
of 2013 is only about sixty percent complete.
As there is no road/rail connectivity to the port, export cargo is not
available thus restricting the port operations/development.
The Government of Pakistan was to release land to PSA for the development
of the port, the land was in the ownership of three armed services. While
the other services vacated their land, Pakistan Navy refused to release
the 584 acres of land under its ownership, at the Shamba Ismail which
lies at the mouth of the port.
Also the deteriorating law and order situation in Balochistan didn’t
help matters.
Due to the above factors, the port was only ever 15 percent operational,
taking these factors into account the PSA and its partners, decided to
quit. The government of Pakistan issued a “No Objection Certificate”
in February 2013, enabling the PSA and its partners to relinquish their
contractual obligations and quit.
The Chinese had turned down a request to take part in the bidding for
operations of the port before the agreement was signed with the PSA joint
venture. However, in December 2010, China had offered the provincial government
to construct 20 more berths and make the port fully operational if the
port was handed over to it.
In 2012, the Supreme Court issued a stay order on the Gwadar Port contract,
barring the PSA from transferring immovable property of the Gwadar Port
to a private party and allowed the Balochistan government to become a
party to the case.
The concession agreement for the development and operation of Gwadar Port,
was transferred to China Overseas Port Holding Company (COPHC), on 18
February 2013. The China Overseas Port Holding Company is a state run
enterprise. It is believed that the Chinese company paid $35.0 million
to SPA for the transfer of the agreement.
The COPHC would undertake the completion of road network connectivity
and invest in the development of the port to make and run it as fully
functional deep sea port.
It is worth mentioning here that if the 584 acres of land under the Pak
Navy ownership is not vacated and transferred to the port, even the Chinese
would not be able to develop the port further.